How export markets for Australia’s beef cuts have evolved

11 April 2018

As an export-dependent sector, Australia’s beef industry has relied heavily on a market diversification strategy to drive growth, manage risk, and keep pace with the changing markets for our many and varied beef cuts across the globe.

The evolution of exports of Australian beef cuts over the past decade reflects a combination of increased export volumes, new market development in emerging markets and changing demand in established markets.

Comparing a three-year average of Australia’s beef export volume from 2015–17 to a decade prior (2005–07), total volume increased around 18%, spurred on by a drought-driven production increase.

If we split out grassfed and grainfed beef and consider Australia’s top 10 export markets and the top three beef cuts we export to each by volume, some notable shifts are revealed.

A decade ago, Australia’s key grainfed beef export markets were dominated by Asia and North America. Today, these markets have been joined by new destinations in Europe and the Middle East.

The top three cuts of our top 10 grainfed beef markets now feature somewhat less manufacturing and striploin and more silverside/inside, topside/inside and chuck roll.

The percentage of exports to each key export market dominated by the top three cuts have also seen some diversification. A decade ago, the top three cuts of Australia’s grainfed beef exports to Japan comprised 56% of our exports, compared to 47% a decade later.

Focusing on grainfed cube eye/rib eye roll, our markets have markedly diversified. In 2005–07, the top three markets – Japan, South Korea and United States – took more than 90% of this cut. In 2015–17, the same three countries took 60%, with a larger number of countries taking smaller volumes of this cut.

Similarly for grainfed striploin, in 2005–07 Australia’s top three markets – Japan, South Korea and the US – took 92% of this cut. A decade later in 2015–17, the top three markets – Japan, South Korea, and China – took 70%.

Looking at Australia’s grassfed beef exports, the past decade has also seen some significant shifts in destination markets among the top 10, as Russia stopped importing from the second quarter of 2014 and demand grew in China, Philippines and Malaysia. A surge in demand from Saudi Arabia as a result of that country’s three-year ban on Brazilian beef imports from 2013 to the end of 2015 also contributed to a change in markets.

Focusing on Australia’s grassfed shin/shank exports, while the overall volume exported has remained relatively unchanged over the past decade, more of this product is now destined for a larger number of markets, and less concentrated in a few big markets.

In 2005–07, 94% of grassfed shin/shank was exported to our top three markets – the US, Taiwan and South Korea. In 2015–17, our top three markets – China, Taiwan and the US – comprised 85%.

Traditionally, the biggest markets for Australian grassfed brisket in 2005–07 were Japan and South Korea, followed by South Africa and China. In 2015–17, greater export volumes have been able to meet increasing demand for this cut among a wider group of countries – Japan closely followed by China, then South Korea, the US, Hong Kong, Canada and Taiwan.

In 2005–07, Australia’s top three grassfed brisket destinations – Japan, South Korea and South Africa – took around 98% of this cut. In 2015–17, our top three – Japan, China and South Korea – took 83%.